Forestay, a new VC firm based in Geneva, Switzerland, has been busy. This week it closed its second fund, Forestay Capital II, at a hard cap of $220 million. The VC was not well known in Europe until it started leading rounds in corporate startups a few years ago, most notably scanning software startup Scandit, which raised $273 million in Zurich.
The Forestay II fund said it would invest across Europe and Israel, focusing on lead growth rounds of between $10 million and $15 million, which are turning points for the company.
So far, the VC has backed 13 companies, including K2view, Nexthink, Scandit, and Wasabi, three of which have reached unicorn status and two have been acquired. Most recently, the firm backed Neural Concept, a spin-off from the Swiss Federal Institute of Technology in Lausanne (EPFL), which raised $27 million in a Series B round to address rapid manufacturing design using AI.
Forestay also led a $12 million Series A round for Portuguese “predictive maintenance” startup Stratio in 2021.
The Foresta Fund was established as a fund of B-Flexion, a private equity firm created by the Bertarelli family, which is famous for growing Serono into the world’s third largest biotechnology company before its merger with Merck KGaA.
Forestay is led by Frederik Wollwend, former Global Chief Digital Officer (CDO) of Merck KGaA and Serono.
“As the chief digital officer of a large company, primarily in the biopharma clinical space, I had the opportunity to look at the entire value chain from early research all the way to distribution at a fairly large company,” he told TechCrunch in a phone call. “So I decided to focus on enterprise and enterprise AI because I know the enterprise inside and out.”
While it’s a “competitive market,” Wohlwend said the fund will be “extremely focused on the way we do venture,” adding, “We just do enterprise AI and SaaS. We don’t do hardware, we don’t do sensors or anything like that. We’re very stage-focused. We play primarily in Series B. We can do A to C rounds, but our sweet spot is Series B at the tipping point. So we brand ourselves as a ‘near-growth’ fund because we capture our targets as soon as they have any kind of revenue.”
He added that in addition to Switzerland being an “interesting ecosystem”, southern Europe is also on the rise, as we recently reported.
Forestay's new fund is also backed by Anaïs Ventures, the investment vehicle for some members of the Firmenich family that created the perfume empire.
“Forestay’s focused investment strategy and operational acumen honed through many years of industry experience align perfectly with our vision,” Julien Firmenich said in a statement.
The European consumer market is very fragmented in terms of geography and language, making it a great market for SaaS and enterprise, and there are also a lot of enterprise-focused VCs.
In fact, in our in-depth analysis of the top companies and trends in the SaaS market in Europe and Israel last year, we found that the SaaS ecosystem market reset was being driven by the growth of generative AI. But Forestay’s emergence can only be a good thing, and it helps fund selection for growth-stage startups in Europe, where growth capital is harder to come by than in the US.
